WEEK IN REVIEW: July 27-2 August

Last week, when the Chinese central bank announced it was holding 1,658 tonnes of gold, the entire financial media came up with huge headlines showing stupefaction about such an important increase since 2009, the last time there was an official update (1,054 tonnes). An increase of 57% in six years... should we be astonished? Actually, this number is far from being impressive: it only shows an 8% yearly increase, the same number (also official) as GDP growth. There is not much risk in betting that this number is cooked, largely under-estimated, and that the financial media will be out of superlatives when the next official announcement is closer to reality.

Central banks in the Western world have set the scene for an "even bigger version" of the 2007-2008 global financial crisis, Societe Generale's bearish strategist Albert Edwards has claimed. Given his forecast step up in money-printing, Edwards said that gold, which tends to perform well during periods of high inflation, was a "must-have" safe-haven investment.

The gold price manipulation scheme will go down as the biggest financial market scandal in US history for numerous reasons. They include the destruction of the free market system in the United States. The manipulation of the gold and silver prices eventually led to the manipulation of US interest rates via the Fed, the stock market via the Plunge Protection Team, and to the currency markets.

Gold has certainly had a rough summer, facing withering selling pressure from record futures shorting. The resulting new secular lows have greatly exacerbated the already-extreme bearish psychology long plaguing this metal. But considering the howling headwinds gold has suffered in recent years, it has actually proved amazingly resilient. This indicates strong latent demand due to accelerate as sentiment shifts.

With the continued uncertainty in the global financial system, investors purchased record Gold and Silver Eagles. Sales of Gold and Silver Eagles remained subdued in the first five months of the year.... that is, until the situation of a possible Greek exit of the European Union stirred up a huge surge in buying in June.

Most of the world's gold is out and has been turned into jewelry. A chart from Macquarie shows we've mined about three-quarters of the planet's gold (that we know about), with only about 55,000 tonnes left to dig out. It will be all gone in 22 years if we keep up a nearly 2,500-tonne-a-year extraction rate and don't find any more.

If you are a precious metals investor, you need to see this chart. Matter-a-fact, this is the first time (to my knowledge) in the history of precious metals analysis that the information in this chart has been made public. One look at this chart and the investor will see the the huge difference between the cost to produce the precious metals.

China now officially have 1,658 tonnes of gold, could they have more? - Gold manipulation more obvious than ever! - World Gold Council dismisses gold manipulation - Hedge Funds have a first ever net-short position in precious metals

Egon von Greyerz, the man who predicted 8 months ago in a televised debate that the Swiss National Bank would experience staggering losses, and has become legendary for his predictions on QE, historic moves in currencies, and major global events, warned King World News that the Fed will also experience massive losses that will destabilize the global financial system.

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